Indian shares set for positive start after Fed holds rates steady; elevated oil weighs
- GIFT Nifty futures were at 22,708
Indian shares are set for a muted opening as the US Federal Reserve held interest rates steady, while elevated oil prices and Middle East conflict risks keep investors cautious.
- US Federal Reserve's decision on interest rates.
- Impact of elevated oil prices on Indian equities.
- Foreign portfolio investor activity in Indian markets.
Indian shares are expected to open little changed on Thursday after the US Federal Reserve held interest rates steady, as expected, while elevated oil prices kept investors cautious.
GIFT Nifty futures were at 22,708 as of 7:35 a.m. IST, indicating a muted start for the benchmark Nifty 50, which closed at 22,698.85 on Wednesday.
The Federal Reserve kept interest rates unchanged on Wednesday, opting to delay any changes to borrowing costs until after next week’s US midterm elections while it awaits further data on inflation, which it said “remains elevated.”
Higher interest rates increase the appeal of Treasuries and the dollar, making emerging market equities, including India, less attractive for foreign portfolio investors.
FPIs bought Indian shares worth 8.72 billion rupees ($91.58 million) on Wednesday in a second consecutive session of buying, provisional data showed. They have offloaded $3.74 billion worth of shares so far in October.
Brent crude futures hovered around $115 per barrel, as traders weighed Middle East conflict risks to regional energy supplies.
Indian equity benchmarks have dropped in six of the last seven trading sessions as elevated oil prices raised concerns over knock-on effects on inflation, interest rates and the rupee.